Question
44444_ On January 1, 2021, Rupar Retailers purchased $100,000 of Anand Company bonds at a premium of $5,000. The Anand bonds pay 7% interest but
44444_ On January 1, 2021, Rupar Retailers purchased $100,000 of Anand Company bonds at a premium of $5,000. The Anand bonds pay 7% interest but were purchased when the market interest rate was 6% for bonds of similar risk and maturity. The bonds pay interest semiannually on June 30 and December 31 of each year. Rupar accounts for the bonds as a held-to-maturity investment, and uses the effective interest method. In Rupar's December 31, 2021, journal entry to record the second period of interest, Rupar would record a credit to interest revenue of:
Multiple Choice
$3,336.
$3,140.
$3,000.
$3,500.
2_
Dim Corporation purchased 1,000 bonds of Witt Corporation in 2018 for $800 per bond and classified the investment as securities available-for-sale. The value of these holdings was $400 per bond on December 31, 2019, and $300 per bond on December 31, 2020. During 2021, Dim sold all of its Witt bonds at $350 per bond. If Dim records unrealized holding gains and losses up to the moment of sale, what would be the amount of reclassification adjustment that Dim would record upon sale?
Multiple Choice
A debit of $500,000.
A credit of $500,000.
A debit of $450,000.
A credit of $450,000.
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